The rapid rise of e-commerce has led to predictions of the downfall of smaller shops like local bookstores and independent record outlets. But will it wipe out the whole high street as well?
The Royal Insititution of Chartered Surveyors seemed to be saying that last week, to publicise a slab of futurological research entitled, 2020: Visions Of the Future. In fact it doesn't quite say that.
David Fitzpatrick, RICS Research Foundation director, admits that this particular hook was dreamt up by their PR advisers. What the report does say is that a large portion of the high street will come under pressure - both from the net and from social trends. It will need to adapt to survive.
Mike Godliman, director of the retail researchers Verdict, agrees. Customers want to save time or have fun. "There has been a general trend towards people wanting either quality or value," he says. "That's why middle market retailers like Sainsburys and British Home Stores have had problems." People can, in theory, minimise 'chore' shopping at the supermarket and instead try out retail entertainment destinations, like the funky new coffee shop.
People in the UK clearly want to supermarket shop online, according to market leader Tesco, which today took the number one slot in a survey of the fastest growing internet companies in the world by Novell. Last week Tesco annouced that, due to consumer demand, it would treble the number of stores offering online shopping. It's been trialing its Tesco Direct service at 100 stores, and plans to offer it at 300 outlets by the end of the year.
To survive, the average high street needs to respond , says Fitzpatrick. It needs to ditch the standardised BHS style of shopping for more niche experiences, for shops that change and reinvent themselves and their markets regularly. Net shopping may even be catered for on the high street, Fitzpatrick suggests, through businesses that offer access to net shopping and serve as pick up points for deliveries.
There could even be a resurgence in neighbourhood shops, Verdict's Mike Godliman states. "The neighbourhood is beginning to bounce back, because people want convenience. They want to supplement their main shop with individual items, which they can do at the corner shop. Neighbourhood shops could also be a marvellous place to pick up your net purchases. No one's tried that yet. But it could help people who buy online but are out at work all day."
Similar ideas are explored by William Mitchell, Dean of the MIT school of Architecture and Planning, in his new book E-Topia (published by MIT Press), which looks at the general impact of networks on urban centres. Mitchell suggests that the growth in teleworking could drive a neighbourhood renaissance. Bored teleworkers will be looking to take a break from the screen at home, but won't have time to go far. So there is an opportunity for shops that target them.
Over the years, different infrastructures like water supplies and electricity grids have been imposed on cities and changed them, Mitchell argues. He sees the arrival of digital telecommunications as continuing the general 'fragmentation and recombination' that takes place when new infra-structures are deployed. "You see contradictory things happening at once. In retailing, you get decentralisation of the browsing and purchasing functions. Those functions used to be within a store and now fragment and recombine with domestic space.
"At the same time, to achieve economies of scale, the distribution functions tend to centralise. So you get big warehouses. You get neither rampant centralisation nor rampant decentralisation but a complicated process of fragmentation and recombination."
Mitchell doesn't believe that high streets and malls will die. However, he does suggest that, thanks to the efficiencies of e-commerce, bookshops may not be around in the same way in 30 years time. Those with a historical aura - for example, City Lights, in San Francisco, the honorary home of the Beats - will survive.
British researchers are less willing to predict the death of certain retail sectors. Professor Leigh Sparks, author of the RICS Research Foundation's report on the future of shopping, suggests that - despite people generally assuming clothes shops will survive but that travel agents and financial services will be vulnerable to online competition - you can't generalise.
"The shops that will suffer are those that are providing functional transactions. If they're not providing anything more than that, why should I bother going to them when I can do that functional transaction every bit as well online or at a remote location?" In other words, if a travel agent offers a different sort of experience - better information, a nice place to browse - it may survive. So what about music? This week EMI was absorbed by Time Warner-AOL. Analysts suggested that the company was looking to prepare itself for a future in which music is delivered to consumers via the net. Sparks agrees that much music will be delivered digitally in the future, but argues that many consumers may not prefer to own music in that way. "They may prefer to go to a store, listen to a range of things, have a coffee, maybe download 10 tracks from the EMI back catalogue onto a specially made CD."
Discussion about the effects of net shopping tends to focus on the high street. Might the big out-of-town superstores also come under pressure as more people shop online for groceries and other bulk purchases? Verdict's Mike Godliman believes that out of town shopping for DIY goods, electricals and furniture, will take a while to take off online, but that the threat of the net may force these real world stores to get better. "If you think about electrical stores, they're not that enjoyable an environment to be in, for most people. But they could be brilliant. There are so many fantastic little goodies in there to play with. I think the net will act as a catalyst for electrical stores to start thinking more creatively about their space."
The general conclusion seems to be that the rise of net shopping could actually be an opportunity for creative high street retailers. It's a potentially positive message, though one that ignores a few key problems, according to the RICS's David Fitzpatrick. "We're seeing a clear divide between those who have and those who have not. Those who have access to the technology will be able to decide when they want to buy something and how they want to buy it, and then spend time with fairly high cost differentiation in the high street. So they'll go to the nice coffee shops or the nice clothes shops and they'll become more interested in retail-tainment."
Those who don't have access may find themselves shut out of all sorts of retail spaces and given access to a limited range of low quality goods, he continues. So creative government intervention may be needed to solve these problems of access, he concludes. It's certainly easy to see how high streets might dodge death by reinventing themselves as "differentiated themed experiences". It's rather harder to see how they might be really reborn as genuine community centres.
For more information about the RICS Research Foundation and 2020: Visions of the Future, go to www.rics-foundation.org. Verdict's website is at http://www.verdict.co.uk. William Mitchell's website is http://loohooloo.mit.edu/people/mitchell.html.
